Century of the Self Part 3 - The Policeman in Our Heads

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Produced and Written by Adam Curtis

This is a series about how Sigmund Freud's ideas about the unconscious mind have been used by those in power to control the masses in age of democracy. Last week's episode showed how Freud's ideas spread throughout America in the 1950s. They were promoted by his daughter Anna, and by Freud's nephew Edward Bernays who invented public relations. He brought Freud's theories into the heart of advertising and marketing.

What they both believed is that underneath all human beings was a hidden irrational self which needed to be controlled both for the good of the individuals and the stability of society. But the Freuds were about to be toppled from power by opponents who said they were wrong about human nature. The inner self did not need to be repressed and controlled, it should be encouraged to express itself.

Out of this would come a new strong type of human being and a better society. But what in fact emerged from this revolution was the very opposite. An isolated, vulnerable and above all greedy self. Far more open to manipulation by both business and politics than anything that had gone on before. Those in power would now control the self not by repressing it by feeding it's infinite desires.

The Century of the Self

Part Three

There Is A Policeman Inside Our Heads He Must Be Destroyed

In the 1950s a small group of renegade psychoanalysts began a new form of therapy. They worked in small rooms in New York City and encouraged their patients to express their feelings openly. It was a direct attack on the theories of the Freudian psychoanalysts who had become rich and powerful teaching Americans how to control their feelings.

Dr. Alexander Lowen - Experimental Psychotherapist 1950s: In Freud's work you see they were afraid of the feelings. What they wanted was contained people very proper doing the right thing and living the proper life. That's what they wanted. And not an intense emotional life. Freud wasn't emotional himself, I mean he's an intellect Freud. I was an intellect too, I know, but I'm also more than that now.

The leader of this group was a man hated by Freud and his family. He was called Wilhelm Reich. Reich lived an isolated life in a house he had built for himself in the remote mountains near the Canadian border. Reich had originally been a disciple of Freud's in Vienna in the 1920s but he had challenged Freud over the fundamental basis of psychoanalysis.

Freud argued that at heart that human beings were still driven by primitive animal instincts. The job of society was to repress and control these dangerous impulses. Reich believed the complete opposite. The unconscious forces within the human mind he said were good. It was their repression by society that distorted them. That was what made people dangerous.

Morton Herskowitz - Student of Wilhelm Reich 1949-52: Reich and Freud had two fundamentally differing views about what was essential human nature. At its core Freud saw an uncontrolled violent war-like raging inferno of emotions. Reich said these things are not the way human beings are originally destined to be, they're the result of not permitting the original impulse to express itself.

The underlying natural impulse Reich argued was the libido, sexual energy. If this were released than human beings would flourish. But this idea brought him into direct conflict not only with Sigmund Freud, but with Freud's daughter Anna who believed that the sexual forces in humans were dangerous if not controlled.

Lore Reich Rubin - Daughter of Wilhelm Reich: My father thought that you should liberate the libido and have freedom. He developed a theory rather early that neuroses were due to lack of good orgasm or any orgasm. And Anna Freud you know was a virgin, and this was very important because she never had a sexual relation with a man, and here was this man preaching that the way to health was through orgasm, and here was this woman who had been analyzed by her father because she was masturbating. So here's this woman who's opposed to sexuality really and here's this man who's preaching sexual freedom and there was bound to be a clash, wasn't there?

The conflict came to a head at a conference in 1934 in Switzerland. Anna Freud who had by now become the acknowledged leader of the psychoanalytic movement forced Wilhelm Reich out. She had destroyed his career.

Lore Reich Rubin - Daughter of Wilhelm Reich: She got rid of him, very definitely. And I guess part of what I am doing is getting rid of her. I think that Anna Freud shouldn't get away with what she did, that it should be known. Maneuvering to get him kicked out of the International Psychoanalytic Association. So you're taking revenge? You might say so, or wronging a right - No, righting a wrong. You better cut that one out. Isn't that called a Freudian slip? Yes it is (laughing).

Reich fled to the United States and built his home and a laboratory. His ideas became grandiose to the point of madness. He was convinced that he had discovered the source of libidinal energy. He called it 'orgone energy' and Reich built a giant gun which he said could capture this energy from the atmosphere and concentrate it onto clouds to produce rain. He also said that the gun could be used to destroy UFOs which threatened the future of the world.

In 1956 Reich was arrested by the federal authorities for selling a device that he said used orgonic energy to cure cancer. Reich was treated as a madman. He was imprisoned and all his books and papers were burned at the order of the court. A year later Reich died in prison. To the Freudians it had seemed that their main threat had been removed forever.

But they were wrong. What the Freudians didn’t realize was that their influence in American society was also about to be challenged. And in a way that would lead not only to their decline but to the dramatic resurgence of Reich's ideas in America and throughout the capitalist world.

By the late 1950s psychoanalysis had become deeply involved in driving consumers in America. Most advertising companies employed psychoanalysts. And as last week's episode showed they had created new ways to understand consumers' motives, above all with the focus group in which consumers free associated their feelings about products. Out of this came new ways to market products by appealing to the hidden unconscious desires of the consumer.

But in the early sixties a new generation emerged who attacked this. They accused American business of using psychological techniques to manipulate people's feelings and turn them into ideal consumers.

Robert Pardun - Student Activist early 1960's: Advertising was manipulation it was a way to get you to do something that didn't come out of you, it came out of somebody else. Somebody else said 'this year you should be wearing powdered pink shirts with matching powdered pink buck shoes' and I said Why? That's not who I am, that's who somebody else is. They wanted you to be somebody who would buy their stuff. This whole feeling of being somebody else's tool, I don't want to be that. I don't want to be somebody else's man. I want to be me.

In the mid sixties a protest movement began on America's campuses. One of the student's main targets was corporate America. They accused the corporations of brainwashing the American public. Consumerism is not just a way of making money it had become a means of keeping the masses docile while allowing the government to purse a violent illegal war in Vietnam.

The students' mentor was a famous writer and philosopher called Herbert Marcuse. Marcuse had studied psychoanalysis and was a fierce critic of the Freudians. They had he said helped to create a world in which people were reduced to expressing their feelings and identities through mass produced objects. It resulted in what he called one-dimensional man - conformist and repressed. The psychoanalysts had become the corrupt agents of those who ruled America.

Herbert Marcuse - Interviewed 1978: It was one of the most striking phenomena to see to what extent the ruling power structure could manipulate manage and control not only the consciousness but also the subconscious and unconscious of the individuals. And this took place on a psychological basis by the control and the manipulation of the unconscious primal drives which Freud stipulated.

Following the logic of Marcuse's argument the new student left set out to attack this system of social control. It was summed by the slogan 'There's a policeman inside all our heads - he must be destroyed'. And that policeman was going to be destroyed by overthrowing the state and the corporations that had put him there.

One group, the Weatherman had begun a series of attacks on companies that they said both controlled people's minds through consumer products and made the weapons being used in Vietnam.

Bernadine Dohrn - Founder of Weatherman Revolutionary Group: There's no way to be committed to non-violence in the middle of the most violent society that history has ever created. I'm not committed to non-violence in any way.

Linda Evans - Member of Weatherman Revolutionary Group: We want to live a life that isn't based on materialistic values, and yet the whole system of government and the economy of America is based on profit; on personal greed and selfishness. So that in order to be human, in order to love each other and be equal with each other and not place each other in roles we have to destroy the kind of government that keeps us from asserting our positive values of life.

The American state fought back violently. At the democratic convention in Chicago in 1968 the police and the national guard were unleashed to attack thousands of demonstrators. It was the start of a phase of repression of the new left in America. It culminated in the killing of four students at Kent University 18 months later. In the face of this the left began to fall apart.

Robert Pardun - Student Activist early 1960's: We had met the force of the state. It was much bigger and stronger and more powerful than we realized. And at that point what seemed to happen was that there was a change in tactics.

Confronted by this violent repression, many in the left began to turn to a new idea. If it was impossible to get the policeman out of one's head by overthrowing the state instead one should find a way of getting inside one's own mind and remove the controls implanted there by the state and the corporations. Out of this would come a new self, and thus a new society.

Stew Albert - Founding member of Yippie Party: People who had been politically active were persuaded that if they could change themselves and be healthy individuals and if a movement grew up just aimed at people changing themselves then at some point all that positive change going on - well you could say quantity would become quality - and there would be sort of a spontaneous transformation of society. But political activism was not required.

Robert Pardun - Student Activist early 1960's: It's about making a new you. That if enough people changed the way they were that the society would change. So the personal would become political. Without changing the personal you didn't stand a chance of changing the political. Coming up against the state power of the United States was not an option. They outgunned us.

And to produce the new self they turned to the ideas and techniques of Wilhelm Reich. Since his death a small group of psychotherapists had been developing techniques based on Reich's ideas. Their aim was to invent ways that would allow individuals to free themselves from the controls implanted in their minds by society.

Their center was a tiny old motel on a remote coast of California. It was called the Esalen Institute. The dominant figure at Esalen was a psychoanalyst called Fritz Perls. Perls had been trained by Reich and had developed a form of group encounter in which he pushed individuals to publicly express the feelings inside them society had said were dangerous and should be repressed.

Michael Murphy - Founder of Esalen Institute: Perls used to call this getting on the hot seat in front of a group. If this were the hot seat and you were Perls you would guide me into this process of self-enactment, self revelation, of staying present to all the parts of yourself and noticing it then taking ownership of this. In other words taking ownership of who you are and how you feel and how you act and giving you autonomy. Owning your freedom.

What Perls and other who were at Esalen believed was that they were creating ways that allowed individuals to express their true inner selves. Out of this they believed would come new autonomous beings free of social conditioning. To the left, defeated in the wake of Chicago, it was an enormously attractive idea. These techniques could be used to unleash a new powerful self string enough to overthrow the old order.

In the late sixties and early seventies thousands flocked to Esalen. Only a few years before it had been an obscure fringe institute. Now it became the center of a national movement for personal transformation. The human potential movement.

Michael Murphy - Founder of Esalen Institute: So it became magnetic. People wanted to join this stream of exploration. Within about seven years there were 200 hundred of these centers in America looking mainly to Esalen for leadership. And it took on a big political agenda. You could not separate personal transformation from social transformation. The two go together.

As the movement grew the leaders of Esalen tried to use their techniques to solve social problems. They began with racism. They organized an encounter group for white and black radicals. Both groups would be encouraged to express their inner racist feelings which had been instilled in them by society. By doing this they would transcend those feelings and encounter each other as individuals.

George Leonard - Encounter Group Leader Esalen Institute 1960s: I started a series of encounters called 'racial confrontation as transcendental experience'. We thought that we wanted to get that kind of black/white confrontation so you could really get down to see what was between the two races not by backing off and trying to be polite but by going right into the belly of the beast, this beast of racial prejudice. And these were extremely dramatic, these were the toughest workshops ever convened at Esalen Institute. Then the blacks got together and attacked the whites. And they just let us have it. What they called it was peeping somebody. Peeping somebody means peeping into their secrets. Into their phoniness and so forth. Like the white liberal, oh they really got onto the white liberal.

The black/white encounter groups were a disaster. The black radicals saw it as an insidious attempt to destroy their power. By trying to turn them into liberated individuals, Esalen was removing the one thing that gave them power and confidence in their struggle against racism; their collective identity as blacks.

So the human potential movement turned to another social group they believed would benefit from personal transformation. Nuns. And this time they were more successful. The Convent of the Immaculate Heart in Los Angeles was one of the largest seminaries in America. A group of radical psychotherapists approached the convent. They wanted to try out their techniques for personal liberation on individuals whose identities were defined by a series of external rules which they had deeply internalized. The convent, anxious to appear modern, agreed to the experiment.

Dr. William Coulson - Nuns' Encounter Group Leader: And we did weekend encounter workshops for several hundred Immaculate Heart nuns. Nuns who were reserved, and they tended to be more reserved than regular people were told don't be so reserved, let it all out, you are a good person you can afford to be who you really are, you don't need to play the role of a nun, you don't need to keep downcast eyes. Prudence is an oversold virtue.

Immaculate Heart novice nun - Interviewed during psychotherapy experiment: You are trying to assert yourself, trying to find out who you are, who you are becoming, at the same time you are trying to live a life of dedication of service and you are trying to make all of these things fit into who you are, and it's such a turmoil at times that you just blow a gasket and do silly crazy things. Running around the orchard and stealing oranges and taking Cokes out of the refrigerator, crazy things.

Another nun: I felt like I was being a hypocrite and I wanted people to respect me for what I was not for what I was wearing and so I'm glad for the change. You feel frightened but you go on. Oh yeah I'm scared to death but it's worth it.

The experiment began to transform the convent. The nuns voted to discard their habits in favor of ordinary clothes. The psychotherapists had found they had awoken other forces.

Dr. William Coulson - Nuns' Encounter Group Leader: One of the things we unleashed was sexual energy, the kind of thing the church had been very good at restraining was no longer to be restrained. One sister who was a member of the community she got the idea that she could be freer than she had been before and she seduced one of her classmates and then seduced the mistresses of novices who was an older woman very reserved and her program of freeing this older woman was sexual. She drove her to the store and when they drove back and when they drove into the garage she leaned over and gave her a big kiss on the lips and thereafter the sister who had perhaps never been kissed before was ready for more.

The effect of the experiment on the convent was cataclysmic. Within a year 300 nuns, more than half the convent petitioned the Vatican to be released from their vows and six months later the convent closed its doors. All that was left was a small group of nuns, but they had become radical lesbian nuns who thus gave up the religious life. They became persons.

By the late sixties the idea of self exploration was spreading rapidly in America. Encounter groups became the center of what was seen as a radical alternative culture based on the development of the self free of a corrupt capitalist culture. And it was beginning to have a serious effect on corporate America because these new selves were not behaving as predictable consumers.

The life insurance industry in particular was concerned that fewer and fewer college students were buying life insurance when they left university. They asked Daniel Yankelovich, America's leading market researcher to investigate. He had studied psychoanalysis.

Daniel Yankelovich - Yankelovich Partners Market Research Inc: The life insurance business more than any other business at the time was built on the protestant ethic. You only bought life insurance if you were a person who sacrificed for the future. If you lived in the present you had no need for life insurance. So they had some sense that maybe the core values of the protestant ethic were being challenged by some of these new values that were beginning to appear. And I was really astonished at what I found. The conventional interpretation was that it had to do with political radicalism. But what was clear to us was that that was a mask, a cover. The core of it had to do with self expressiveness. This preoccupation with the self and the inner self, that was what was so important to people, the ability to be self expressive.

Yankelovich began to track the growth and behavior of these new expressive selves. What he told the corporations was that these new beings WERE consumers but they no longer wanted anything that would place them in the narrow strata of American society. Instead what they wanted were products that would express their individuality, their difference in a conformist world. They very things that US corporations did not make.

Daniel Yankelovich - Yankelovich Partners Market Research Inc: Products have always had an emotional meaning. What was new was individuality. The idea that this product expresses me and whether it was a small European car, the particular music system, your presentation of self, your clothing, these become ways in which people can spend their money in order to say to the world who they are. But the manufacturers they had no idea what was going on with consumers and in the market of life.

Major advertising companies set up what they called operating groups to try and work out how to appeal to these new individuals. The head of one agency sent a memo to all staff. We must conform he told them to the new non-conformists. We must listen to the music of Bobby Dylan and go to the theater more. But the problem was fewer of the self expressive individuals would take part in focus groups. The advertisers were left to their own devices.

And there was an even more serious problem. To make more products for people who wanted to express themselves would mean creating variety. But the systems of mass production that had been developed in America were only profitable if they made large numbers of the same objects. This had fitted perfectly with the limited range of desires of a conformist society. The expressive self threatened this whole system of manufacturing. And the threat was about to grow rapidly because an entrepreneur had invented a way of mass producing this new independent self. He was called Werner Erhard.

Erhard had invented a system called EST - Erhard Seminar Training. Hundreds of people came for weekend sessions to be taught how to be themselves, and EST was soon copied by other groups like Exegesis in Britain. Many of Erhard's techniques came from the human potential movement. He criticized the movement for not having gone far enough. Their idea that there was a central core inside all human beings was he said just another limitation on human freedom. In reality there was no fixed self which meant that you could be anything that you wanted to be.

Werner Erhard - Founder of EST - The thesis of the human potential movement was that there was something really good down in there and if you took these layers off what you were going to wind up with was a kernel, a something that was innately self-expressive that was the true self that was going to be a wonderful thing. In actuality we found people who had gone to the last layer and took off the last layer and found what was left was nothing.

The EST sessions were intense and often brutal. The participants signed contracts agreeing not to leave and to allow the trainers to do anything they thought was necessary to break down their socially constructed identities.

Werner Erhard - Founder of EST - The real point to the EST training was to go down through layer after layer after layer after layer until you got to the last layer and peeled it off where the recognition was that it's really all meaningless and empty. Now, that's existentialism's end point. EST went a step further in that people began to recognize that it was not only meaningless and empty, but that it was empty and meaningless that it was meaningless and empty, and in that there's an enormous freedom. All of the constrictions, all of the rules that you placed on yourself, are gone. And what you are left with is nothing, and nothing is an extraordinarily powerful place to stand because it is only from nothing that you can create and from this nothing people were able to invent a life, allowing them to create themselves. To invent themselves. You could be what you wanted to be.

Jesse Kornbluth - Journalist, New Times 1970s - What Erhard did was to say that only the individual matters, that there is no societal concern, that you living a fulfilled life is all you need to be concerned about. EST people came out of those training sessions thinking that it wasn't selfish to only be thinking about yourself, it was your highest duty.

John Denver - EST Graduate (being interviewed on television) - The training is two weekends and it was quite an incredible experience in my life, and I'll forever be grateful for it. I got a great deal out of it. We really want to know who we are, there are things going on where we learn a great deal about ourselves all the time, and to really find out what it is about us that makes us tick and how we are discovering ourselves.

EST became hugely successful. Singers, film stars, and hundreds of thousands of ordinary Americans underwent the training in the 1970s. But in the process the political idea that had begun the movement of personal transformation began to disappear. The original vision, that being through discovering and expressing yourself a new culture would be born, one that would challenge the power of the state. What was emerging was the idea that people could be happy simply within themselves and that changing society was irrelevant. One of the proponents of this was Jerry Rubin. In 1968 Rubin, as leader of the Yippies had led the march on Chicago. But now he had undergone EST training.

Jerry Rubin - Founder of Yippie Party - Interviewed 1978 - I was willing to die and I had a martyr complex in a sense, I think we all did, and I've given up that ideal - sacrifice. I'm not as overwhelmingly moved by injustice as I was. And now we've reincarnated ourselves from within.

Stew Albert - Founder member of Yippie Party - Basically the politics were lost and totally replaced by this lifestyle and then the desire to become deeper and deeper into the self. By now a grandiose sense of the self. And my good friend and one of the original Yippie founders Jerry Rubin definitely moved in that direction and I think he was beginning to buy into the notion that he could be happy and fully self developed on his own. Socialism in one person. Although that of course is capitalism.

Werner Erhard - Founder of EST - That's the whole joke. I think it's funny because people spend so much of their life being bedeviled by their past and being locked into their past, and being limited by their past, and there's an enormous freedom from that, letting people create themselves.

EST was only the most vivid intense expression of a movement that was moving rapidly through all strata of American society. Books and television programs promoted the idea that one's first duty was to be one's self. And those monitoring this shift were astonished at the speed with which the idea was spreading.

Daniel Yankelovich - Yankelovich Partners Market Research Inc. - In 1970 it was a small percentage of the total population, maybe 3 to 5 percent. By 1980 it had spread to the vast majority of the public up to 80 percent. That this pre-occupation with the self and the inner self, traveled and spread throughout the society in the 1970s. But then the problem becomes how do you be self-expressive.

And it was at this point that American capitalism decided it was going to step in and help these individuals to express themselves and in the process make a lot of money. The first thing they were going to do was to find a way of getting inside their heads to discover what these new beings wanted in order to be themselves. This came not from Madison Avenue but from one of the most powerful scientific research institutes in America. Stanford Research Institute (SRI) in California worked for corporations and government. It had done much of the early work on computers and was also working for the department of defense and what would become the Star Wars project. In 1978 a group of economists and psychologists at SRI decided to find a way to read, measure, and fulfill the desires of these new unpredictable consumers.

Jay Ogilvy - Director of Psychological Values Research, SRI 1979-88 - The idea was to create a rigorous tool for measuring a whole range of desires, wishes, values, that prior to that time had been overlooked. They say in business, you know, 'What gets measured, gets done'. We were basically telling manufacturers if you are really going to satisfy not just the basic needs but individuated wants, whims and desires of more highly developed human beings you are going to have to segment, you are going to have to individuate.

To do this SRI turned for help to those who had begun the liberation of the self. In particular one of the leaders of the human potential movement, a psychologist called Abraham Maslow. Through the observing the work of places like Esalen, Maslow had invented a new system of psychological types. He called it the hierarchy of needs, and it described the different emotional stages that people had went through as they liberated their feelings. At the top was self-actualization. This was the point at which individuals became completely self-directed and free of society.

The team at SRI thought that Maslow's hierarchy might form a basis for a new way to categorize society. Not by social class, but by different psychological desires and drives. To test this, they designed a huge questionnaire with hundreds of questions about how people saw themselves - their inner values. The questions were designed to see whether people fitted into Maslow's categories.

Amina Marie Spengler - Director Psychological Values Research Program 1978-86 - We were trying to find out what people really felt like. So we asked these really penetrating questions and we hired a company that administers surveys to do them and they said they had never seen anything like it. Usually you have to send out a postcard and then in six weeks another postcard and then you have to call the people up, you know to get the return rates up, we had an 86 percent return and they only sent out a postcard. People loved filling out this questionnaire. We got several questionnaires back with a note attached saying do you have any other questionnaires I can fill out? Because we were asking people to think about things that they had never thought about before and they liked thinking them. Like what they felt inside, what motivated them, what was their life about, what was important to them. It was sort of like, wow.

The answers were then analyzed by computer. It revealed there were underlying patterns in the way people felt about themselves which fitted Maslow's categories. And at the top of the hierarchy were a large and growing group which cut across all social classes. The SRI called them the inner directives. These were people who felt they were not defined by their place in society but by the choices they made themselves. But what SRI discovered was that these people could be defined by the different patterns of behavior through which they chose to express themselves. Self expression was not infinite, it fell into identifiable types. The SRI team invented a new term for it - lifestyles. They had managed to categorize the new individualism. They called their system Values and Lifestyles, VALs for short.

SRI Values and Lifestyles promotional video 1983 - At the forefront of this change are three new VALs groups, groups we call inner directed. These are people for whom personal satisfaction is more important than status or money. They tend to be self expressive, complex, and individualistic. Rob is an I-am-me. I am me's are searching for new values, breaking away from traditions and inventing their own standards. Rob even invented his own name - Rob Noxious. Jody is an Experiential. This is a group seeking inner growth through direct experience. Experientials are in one place much, this is the try-anything-once crowd, and all that activity takes goods and services. Their hobbies are hands-on and their possessions are simple but not always simply priced. Societally Conscious - (man speaking) I'm a bookseller, I'm a businessman but that doesn't necessarily mean that I believe in capitalism, it just happens to be what I am doing now.

SRI created a simplified questionnaire with just 30 key questions. Anyone who answered them could immediately be fitted into a dozen or so of these groups. It allowed businesses to identify which groups were buying their products and from that how the goods could be marketed so they became powerful emblems of those groups inner values and lifestyles. It was the beginning of lifestyle marketing.

Amina Marie Spengler - Director Psychological Values Research Program 1978-86 - So it allowed people not just to look at people as demographics of age and income or whatever, but to really understand the underlying motivations. I mean most of marketing was looking at people's actions and trying to figure out what to do, but what we were doing was we were trying to look at people's underlying values so that we could predict what is their lifestyle, what kind of house did they live in, what kind of car did they drive. So the corporations were then able to sell things to them by understanding them by having labels, by knowing what people looked like, by where they lived, by what their lifestyles are.

If a new product expressed a particular group's values it would be bought them. This is what made the Values and Lifestyles system so powerful. It's ability to predict what new products self-actualizers would choose. This power was about to be demonstrated dramatically. VALs was about to show not just what products they would buy, but the politicians they were going to elect. In 1980 Ronald Reagan ran for president. He and his advisors were convinced they could win on a program of new individualism. It would be an attack on 50 years of government interference in people's lives.

Jeffery Bell - Speech writer for Ronald Reagan 1976-81 - I wrote a speech about let the people make the basic decisions, get judges out of the way, get bureaucrats out of the way, get centralized government out of the way. I gave Reagan a choice of several titles for the speech, and the one he picked was Let the People Rule, Let the People Regain Rule, regain control over their own destiny away from a remote elite in Washington. It was radical. Modern Republicans thought it was suicide, Jimmy Carter called it ridiculous, the press was extremely negative, but the odd thing was that it polled it very well in New Hampshire, the first primary state that we had to win.

What was odd was there seemed to be a strange mosaic of support for Reagan's policies. The traditional pollsters could see no coherent pattern across class age or gender. But those who had developed the Values and Lifestyles system believed that they knew why. They were testing their system in both America and Britain and they were convinced that both Reagan's and Thatcher's message about individual freedom would appeal to the group at the top of their hierarchy, the inner directed, because it fitted with the way they saw themselves.

Christine MacNulty - Program Manager - SRI Values and Lifestyles Team 1978-81 - They were really concerned about being individuals, about being individualistic, and so in the early stages when we were looking at the messages that both Thatcher and Reagan were putting across we said they are using words that will really appeal to a lot of younger people and particularly the people who are moving towards self-actualization. We called them the inner directed people. A lot of our colleagues said that's absolutely ridiculous because inner directeds are very socially aware, very socially concerned, they'll never vote conservative, or they'll never vote for the Republicans, but we said if Thatcher and Reagan continue to appeal to them in this way they really will.

The idea that the new self actualizing individuals would choose a politician from the right not the left seemed extraordinary. To test their prediction the values and lifestyles team did a survey of voting intentions and they correlated it with their new psychological categories.

Christine MacNulty - Program Manager - SRI Values and Lifestyles Team 1978-81 - When we said in our surveys who are you going to vote for, sure enough it was the inner directeds that said they were going to vote for Thatcher and for Reagan. And they made the difference in those elections. And it really surprised my colleagues even within my own organization. It really showed the power of this approach because it's very difficult to identify inner directed on the street. These people who voted for Thatcher and Reagan, these inner directeds, came from any walk of life. It's really hardly correlated in social class at all. I mean if you just go along and look at age, sex, and social class, you would never pick them up. But if you really go along with a questionnaire that gets at their values then you can identify them very easily, and that was completely new.

At the beginning of 1981 Ronald Reagan was inaugurated as president. But he took charge of a country that was facing economic disaster. The terrible inflation of the 1970s destroyed much of America's heavy industries. Millions were unemployed. But true to his campaign promises Reagan told the country he would not step in to help as all previous governments had since the war. But America's ailing economy was about to be rescued not by government, but by the new groups market researchers had identified, the self actualizing individuals. They were about to become the motor for what would be called the new economy.

Renee M. Love Chairman and CEO Omega Group Inc. - One technique is that we ask people the same question over and over again. We say what do you want, what do you really want, what do you want that for and they start to talk about it and they kind of get intimate with what's going on. What we're doing with that technique is unpeeling the onion. If you want to think of a person as having layers and layers and layers of protection, thoughts and belief, we want to get to the center core.

In the wake of the invention of Values and Lifestyles a vast industry of psychological market research grew out. And the old technique of the focus group invented by the Freudian psychoanalysts of the fifties was used in a new and powerful way. The original aim of the focus group had been to find ways to entice people to buy a limited range of mass-produced goods. But now focus groups were used in a different way, to explore the inner feelings of lifestyle groups and out of that invent whole new ranges of products which would allow those groups to express what they felt was their individuality. And the generation who had once rebelled against the conformity imposed by consumerism now embraced it because it helped them to be themselves.

Stew Albert - Founder member of Yippie Party - What capitalism managed to do that was brilliant was to actually create products that people like me would be interested in. That people like Jerry Rubin would be interested in. Capitalism developed a whole industry at developing products that evoke a larger sense of self, that seemed to agree with us that the self was infinite, that you could be anything that you wanted to be. That took our philosophy and agreed with it. And that created products that supposedly helped you be this limitless self. The product sells you a way of life, a way of being. The products sells you values. You dress this way, you live in a house like this, you have furniture like this, you use this computer, you eat in these restaurants, there are values there. Hipness, coolness, so the notion that you could buy an identity would place the original movement notion that you were perfectly free to create an identity. And you were perfectly free to change the world and make the world anything that you wanted it to be.

And this vast range of new desires fitted perfectly with changes in industrial production. Computers now allowed manufacturers to economically produce short runs of consumer goods. The old restrictions of mass production disappeared, as did the worry that bedeviled corporate America ever since mass production had been invented. That they would produce too many goods. With the new self consumer desire seemed to have no limit.

Daniel Yankelovich - Yankelovich Partners Market Research Inc. - In the United States the concern of companies was always that supply would outstrip demand. That we were producing too much and that there was not a market for it. You don't hear that kind of talk anymore because you've gone from a conception of a market of limited needs, and if you've filled them their filled, to a market of unlimited ever changing needs dominated by self-expressiveness, that products and services can satisfy in an endless variety of ways and ways that change all the time. And consequently economies have unlimited horizons.

Out of this explosion of desire came what seemed a never ending consumer being that regenerated the American economy. The original idea had been the liberation of the self would create news kinds of people free of social constraint. That radical change had happened. But while the new beings felt liberated they had become increasingly dependent in their identity on business. The corporations had realized that it was in their interest to encourage people to feel that they were individuals and offer them ways to express their individuality. The world in which people felt they were rebelling against conformity was not a threat to business but it's greatest opportunity.

Robert Reich - Economist and member of Clinton Cabinet 1993-1997 - It was in a sense the triumph of the self, it was the triumph of a certain self indulgence, a view that everything in the world and all moral judgment was appropriately viewed through the lens of personal satisfaction. Indeed the ultimate ending point of that logic is that there is no society, there is only a bunch of individual people making individual choices about their own individual well being.

Next week's episodes tells the story of how politicians on the left in both Britain and America turned to the techniques developed by business in order to regain power. But what they didn't realize was what had worked for business would undermine the very basis of their political beliefs. They would find themselves trapped by the greedy desires of the new self.